Bipartisanship is scarce today on Capitol Hill, as the party-line vote on the $1.9 trillion Covid-19 relief bill underscored. This makes the bipartisan sponsorship of the Universal Giving Pandemic Response Act all the more notable, reflecting an emerging understanding that the vast majority of taxpayers are excluded from the tax incentives for charitable giving.
The proposed legislation would expand provisions passed in last year’s CARES Act that added a charitable tax deduction of up to $300 ($600 for couples filing jointly) for those who don’t itemize their deductions. Though we don’t yet know how much charitable giving that provision encouraged, it’s likely that it had at least some positive effect. The new bill goes much further, lifting the top deduction to $3,000 for single filers and $6,000 for joint filers. That may seem too generous, but it’s a necessary antidote to an unfortunate side effect of the Trump administration’s 2017 Tax Cuts and Jobs Act: the sharp drop in the number of taxpayers eligible for charitable deductions.
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